Wednesday, July 6, 2011

Organizations Must Incorporate Sustainability Within Their Business Models in Order to Strengthen Their Brand and Create Efficiencies

On June 28, 2011, FedEx announced that it would release 4,000 new fuel efficient vehicles as part of an effort to decrease pollution and become more energy efficient. Dan Beal, the vice president of Global Vehicles at FedEx, stated that “Our goal has always been to optimize and operate our vehicle fleet in an economically and environmentally sustainable manner so that emissions are reduced while serving our customers in the best possible manner.” FedEx, like other leading organizations (including GAP*), understands that aligning CSR strategies to improve their business model efficiencies is a means to create both a reputable and profitable brand.

For a company to be sustainable, it needs to be environmentally conscious in making its business decisions, as well as energy efficient and more resourceful than its competitors. Companies are adapting their business models to become more sustainable because it gives them a competitive edge and consequently improve their profitability. When reading about “The impact of CSR on brand reputation and sales,” I saw that 56% of people are more loyal to a brand that shows that they care about the environment which has become a hot topic due to the increased scare of global warming. The article also shows that 61% of people are more likely to buy from a company that has a good reputation with respect to being genuinely committed to help improve the planet. This shows that sustainability and success are very strongly correlated since sustainability leads to reputation and reputation leads to more loyal customers.

Due to the economic downturn, and increased global competition, it has become crucial for companies to be sustainable. During this post-recession time, by becoming more sustainable, companies are being able to save energy and lower consumption of resources, and perhaps most importantly, boost productivity and increase brand awareness. Companies that don’t understand the business value of sustainability run the risk of impeding their growth and being hurt economically in the long-term. Small to large enterprises are digging their own graves by neglecting to take advantage of sustainability as an essential strategy to reduce costs and enhance efficiency because they are too engrossed in the short term outlook and profitability. The sustainability framework follows the rule of “less is more” by using fewer resources to produce the same, or more, outcome and during this process they will create efficiencies and reduce costs in the long term. Sustainability fosters resourcefulness and gives customers what they want while leaving behind small environmental footprints.

In summary, becoming a leading organization in any industry today means finding ways to become more sustainable. For some companies, this means producing more with less to cut costs while sending a strong message of conservation to customers. A recent survey release by Packaging World shows that 72% of businesses' sustainability initiatives exceeded their expectations in terms of benefits. Sustainability is considered in 68% of business decisions due to the advantages of cost reduction and brand enhancement. The profound effect that sustainability has for a business goes beyond profitability, making a lasting positive impact on the balance sheet, the community and the planet.

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